Sears Holdings Corp (SHLD)

Over the long haul, the branding wrapped up in SHLD will pull through. Craftsman, Lands End, Kenmore, DieHard...these are BRANDS people want even if they don't consider themselves "Sears Shoppers." I think Lampert can pull it together.

As the home buying market improves so will Sears.

I don't know why I'm doing this, but I'm giving an outperform rating on a company that is not well run and is in the clutches of one of those greedy hedge fund managers. I still think there may be hope because of its bookvalue ($80 a share), it has a 45 billion - 50 billion in sales, and is still profitable. I know I'm going against the grain on this one, but I think this is a good contrarian play. Especially if a brilliant retail minded CEO takes the helm and desires to run Sears as a business and not a piggy bank.

SHC's Assets:

1) Strong Brands like Craftsman, Kenmore, DieHard & LandsEnd.

2) Growing Home Services Division which is in over 20 million homes per year!!!

3) Strong Real Estate Holdings.

4) Eddie Lampert!!!

Trading below book and is still cash flow positive.

Long-term bet on Eddie Lampert turning this into a Berkshire-like company.

Eddie Lampert has a great track record

there are so many ways for SHLD to win. for ex., if its ops improve, and they are, and it trades inline with other top retailers at 50 bps sales, it's a $20b market cap.

Sears recognised that they needed to re-evaluate their business model about a two years ago in order to stay competitive in the current market. They are now able to reap the rewards of their fortunes and will probably reward their shareholders nicely for their patience...

Lampert, Margin-of-safety, real estate, brand liquidation, investment vehicle, mini-berkshire, early buffett

el is boss

Second-greatest short squeeze of all time (i.e. after Volkswagen) slowly marching to the launch pad here. The balance sheet and free cash flow reasons to buy this stock are well-detailed elsewhere. This is the fun reason.

I just can't see this strong a company with problems. Only wall street has slowed this giant, simply putt I am in asap.

Sears has great long-term value. Not to mention hidden value in real estate.

Sears brands are known for higher quality and they command a premium price. At the same time, they have excellent values for families that will undoubtedly need to spend down. This means they can turn to Sears to save money from the more specialized retailers.

SEARS = KMART

Way below NAV. Great capital allocator at the helm.

Lampert

Breaking above 200 day MA

How often does Mr. Market offer investors the opportunity to purchase a collection of assets at a significant discount to liquidation value? Occasionally...

How often does Mr. Market throw in a brilliant capitalist to manage those assets at no additional charge? Every decade or so would be my guess...if that.

I figure it would be wise to take advantage when he does.

Call me crazy if I don't subscribe to those who apparantly believe Eddie has gotten "dum dum" over the last year or so. The man has compound capital at 30% a year for 25 years! Lets get serious here, at roughly $70 this is truly a heads I win, tails I don't lose propositon...Dhando!

The bottom line....

Real estate and brand liquidation values provide downside protection (as opposed to being Lampert’s “strategy” as some claim). Over the next few years there are many possibilities that could drive significant upside from today's ludicrous level, but here are a few: (1) The sale or monetization of coveted assets; (2) A successful turnaround of the retail stores; (3) The allocation of capital from poor-performing cash generators (Kmart) to higher return divisions (Lands End) or new investments...

Longer term I am sure Eddie will continue to do what he has always done...compound capital at above average rates for himself and his partners (SHLD shareholders).